What is "Suggested Bid" in Keyword Planner?

I want to know if the suggested bid in keyword planner refers to the amount that Google suggests to bid on a keyword to rank his/her website OR it is the amount that one can earn from the specific keyword?

FOR Example:

If my keyword is "Samsung Mobile" and the suggested bid is "$2.60", this means that Google is suggesting me that my competitors are bidding for this keyword for $2.60 to rank their website and I should also bid around that much bucks to rank for this keyword?

OR

This means that Google is telling me that if I rank on this keyword, I could earn $2.60 for each click on my website?

What is &quot;Suggested Bid&quot; in Keyword Planner?

Your first point regarding suggested bid is correct i.e. you need to bid around that price to win the auction.

Suggested bid is a bid that AdWords suggests to you which according to AdWords will help you record optimal traffic ( Clicks/Impressions). Initially you can use the suggested bids to run your campaigns and then adjust the same depending on the performance of your campaigns.

It is not a mandate that you should always use the suggested bids, it is totally your decision to use it or not. If you do not wish for your CPC's to go beyond a certain threshold, you can optimize your bids using your learnings from running the campaigns.

What is &quot;Suggested Bid&quot; in Keyword Planner?

Your first point regarding suggested bid is correct i.e. you need to bid around that price to win the auction.

Suggested bid is a bid that AdWords suggests to you which according to AdWords will help you record optimal traffic ( Clicks/Impressions). Initially you can use the suggested bids to run your campaigns and then adjust the same depending on the performance of your campaigns.

It is not a mandate that you should always use the suggested bids, it is totally your decision to use it or not. If you do not wish for your CPC's to go beyond a certain threshold, you can optimize your bids using your learnings from running the campaigns.